Public hospital blowout sparks call for reforms over band-aid funding

In the run-up to the May federal election, the state of Australia’s public hospitals has been laid bare, intensifying pressure on the federal government to strike a new National Health Reform Agreement (NHRA).

The Australian Medical Association (AMA) has released a scathing update to its hospital logjam finder tool – now expanded to cover 352 hospitals across the country – and is urging voters to check how their local hospital is really performing.

AMA President Dr Danielle McMullen made it clear: this crisis isn’t new – and it isn’t accidental.

“This is a crisis that was developing long before the Covid-19 pandemic, and the inaction from several consecutive governments at all levels is hitting hard – and it’s the patients who suffer the most,” Dr McMullen emphasised.

The tool uses a traffic light system to show what percentage of patients receive care within clinically recommended timeframes – and the results are alarming. Not a single metropolitan hospital received a green light across all measured categories.

Sixty-seven hospitals earned five or more red lights, a damning indictment of a system failing on nearly every front. Just nine hospitals managed to avoid red lights entirely. The data makes it painfully clear: too many Australians are waiting too long for emergency care and planned surgeries.

NSW continues to hold the unwanted title of the longest median surgery wait time in the country, exposing how deeply the backlog of planned surgeries has entrenched itself.

“Healthcare funding must go beyond simply sustaining services – it must be structured to incentivise and reward high-value care that leads to better health outcomes,” said Kylie Woolcock, CEO of the Australian Healthcare and Hospitals Association (AHHA). “Short-term, rigid funding models fail to provide the security needed for innovation, workforce retention, and sustainable improvements in care delivery.”

The AMA’s public hospital report card reveals that just 55% of emergency department presentations were completed within the target four-hour window in 2023–24 – the eighth consecutive year of decline for this critical benchmark. A third of patients triaged as “emergency” (category two) – those with cardiac chest pain, acute stroke, or severe respiratory distress – weren’t seen within the recommended 10 minutes. That’s up from a quarter just five years ago.

In planned surgeries, the situation is just as dire. The proportion of category two patients (requiring surgery within 90 days) has plummeted from 83% five years ago to just 71% in 2023–24. While that marks a 6% improvement from the previous year, the remaining 29% face delays the AMA describes as “extremely long and potentially dangerous.” These procedures are essential, including heart valve replacements and surgeries for congenital cardiac defects.

Against this backdrop of systemic decline, the federal government has attempted to claim a win: a one-off hospital funding deal for 2025–26, with a headline increase of 12%. But beneath the surface, the numbers don’t add up.

The so-called boost lifts the national efficient price (NEP) from $6,465 to $7,258 – seemingly a 12.3% rise. But after statistical adjustments, the real increase is just 5.9% – barely enough to keep up with population growth and the ageing population, let alone reverse the damage done.

The AMA is warning that what sounds like a generous investment may be little more than political window-dressing.

“The federal government’s promised investment, originally estimated at $13 billion, into our public hospitals is little more than a nice idea if states and territories fail to reach an agreement with the federal government,” Dr McMullen said.

The AMA is calling for urgent action to lift hospital capacity and meet surging demand. Over the next four years, the AMA estimates an additional $12.5 billion in federal funding is needed – on top of $15.3 billion from state and territory governments under a new NHRA.

“When funding is tied only to activity rather than outcomes, we miss opportunities to create a health system that truly meets the needs of people and communities,” Woolcock stated.

“A shift to flexible funding models that are value-based is essential to driving real reform – ensuring that investment leads to improved health, rather than simply more services.”

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